A partnership with Dutch roots puts roasted biomass back in the picture

Biocoal alternative fuel for power production and heating

Summary

At the start of the current decade, “torrefaction” – the roasting of biomass to make it easier to use – was named as a great future prospect before it silently and unsuccessfully disappeared from the stage. Until now, that is; Erik Huis is convinced of that. The CEO of Clean Electricity Generation wants to spend €350 million building torrefaction plants in the coming years.

The word torrefaction comes from the French word torrefier, which means roasting and is mainly used in the context of coffee beans. In short, torrefaction means heating biomass in the absence of oxygen. The big advantage of this treatment is that it transforms the fibrous biomass into a brittle material with similar properties to coal. Torrefaction makes it much easier to use biomass as a fuel; the roasted pellets can be pulverized together with the coal. Outdoor storage is no problem either. These are two important advantages that the roasted variant offers over the conventional biomass pellet.

As the commissioning party, Clean Electricity Generation (CEG) – together with the technology company Stork – is the initiator of the partnership of international companies, which wants to produce biomass pellets (biocoal) on a commercial scale in several locations around the world. This will start in Estonia, where a plant is to be set up with an annual production of 200,000 metric tons by 2020. This means an investment of around €50 million, explains Huis. Subsequent plants are expected to be built in Finland and North America.

The structure of the partnership is as follows. CEG, based in Amsterdam, is an energy innovation company with the patented technology in-house. The basis for this was the drying plant technology of the Carrier company, which is also involved. Carrier is building the torrefaction reactors on the basis of the CEG technology. The construction and maintenance of the torrefaction plants around these reactors will be in the hands of Fluor subsidiary corporation Stork. Capital for the project is being provided by the Dutch private equity firm Momentum Capital, which is also the majority stockholder in CEG.

Torrefaction seemed to have disappeared from the radar having once been predicted to have a great future. In 2010, the Netherlands Enterprise Agency (Rijksdienst Voor Ondernemend Nederland, RVO, then known as Agentschap NL) predicted that 2011 would be “the year of torrefaction”. However, the expected breakthrough never came: it turned out to be much more difficult than expected to translate the production process from a laboratory environment to a commercial scale. In 2013, when Stramproy Green Investments' promising biocoal factory turned out to have played a prominent role in the Rendo fraud case and went bankrupt, faith in the potential of biomass treatment was extinguished.

Investment model

While things were collapsing in Stramproy, the investment company Momentum Capital was starting up the Clean Electricity Generation (CEG) company. Momentum Capital, in which CEG's CEO Erik Huis is also a partner, is in the Dutchman's view “an investor that is greatly involved in the technologies and companies in which we have participating interests.” Momentum Capital has a strong focus on energy transition and on sustainability, especially with regard to technology that can be disruptive. “That's our investment model,” says Huis.

A team was assembled, comprising people with extensive experience and who worked well together. A site was found in Derby in the UK where all the necessary permits had already been granted for the construction of a demonstration plant. The demonstration plant was built, with a modest annual production of 30,000 metric tons of biocoal. Five years after the launch of CEG, the time has now come to scale up to commercial production levels, says Huis.

In the first instance, this will take place in Estonia, primarily because there are adequate residual flows of biomass there. The plant will be located close to the woodworking industry, where there is plentiful waste wood with little commercial value. “It's mainly the twigs and stumps that are left over,” says Huis. With the help of a start-up grant provided by the European Commission, a plant will be set up to produce 160,000 metric tons of biocoal a year, and as much as 200,000 metric tons a year in the future. Stork is working on the design, and the location is currently being prepared for the construction work, Huis tell us by phone from the site in Derby. Construction will begin in the third quarter of this year, and production will commence eighteen months later.

After Estonia, the next plant will be built in Finland, Huis explains, though he doesn't give details of exact locations. After Finland, the next location will be somewhere in North America. “In the coming years, we will be aiming for an annual production of one million metric tons of biocoal, with the option of expanding this to two million metric tons. That will require an investment of approximately €350 million.”

The Netherlands is not in the picture for production, but it is for sales

The Netherlands is not an option for production, explains the Dutch CEO of CEG. “There are not enough low-grade waste flows in the Netherlands to be able to operate a factory of any respectable size.”

However, the Netherlands is definitely a sales market with good potential. With three state-of-the-art coal-fired power stations that are just a few years old – constructed by RWE, Uniper, and Engie – the potential for biomass consumption is clear. “We are in talks with the parties concerned,” is all that Huis wants to say about that. RWE in particular presents itself as a champion of biomass consumption in coal-fired power stations.

“In thirty years' time, not many coal-fired power stations will still be operating in the Western world”

According to Huis, the costs of biocoal per gigajoule would be comparable to those of today's non-torrefied biomass pellets. However, because they have many advantages over such pellets, such as the possibility of outdoor storage and pulverization as mentioned above, biocoal is a more attractive prospect for coal-fired power station operators. With increasing price tags for CO2 emissions, biocoal may even offer a financial advantage over coal in the long run, Huis believes.

CEG's CEO also believes that the future of biocoal is limited. “In thirty years' time, not many coal-fired power stations will still be operating in the Western world,” he believes. In the first instance, biocoal is needed to make biomass in its solid form a global resource alongside oil, coal, and gas. Huis hopes that this will spur innovation, for example by producing biocoal not only from residual wood but also from residual agricultural matter. After that, biomass will be used to produce not just biocoal but also liquid fuels and even plastics.

Boilerplate

About CEG

CEG is an energy innovation company. CEG creates and realises solutions for sustainable energy by processing biomass through torrefaction. It uses sustainable means that are cleaner and less harmful to the environment which replaces unsustainable and expensive resources.CEG's unique torrefaction reactor converts biomass into a range of products such as biochar, biochar dust, biocoal pellets and wood vinegar. CEG's biocoal can then be fired into conventional power plants boilers which is a sustainable alternative to burning conventional fossil coal. The additional benefit of the CEG torrefaction process is the output of syngas that can be used in its syngas generators and directly supply green power.

CEG is a joint venture with leading financial partners: Momentum Capital based in the Netherlands (95%) and Transformative Energy and Materials Capital (TEM Capital) based in Boston (5%). For more information:www.cegeneration.com